A Markov-based decision model was created to assess the cost-effectiveness of augmentation therapy (Aug) for severe alpha1-antitrypsin deficiency, comparing strategies of: (1) no Aug, (2) Aug for life, and (3) Aug until FEV1 is below 35% predicted. A hypothetical cohort of 46-year-old patients with FEV1 49% predicted was followed over time using Monte Carlo simulation across five possible health states: (1) FEV1 50 to 79% predicted, (2) FEV1 35 to 49% predicted, (3) FEV1 below 35% predicted, (4) status-post-lung transplantation, and (5) dead. Treatment for life yielded 7.19 quality-adjusted life-years (QALYs) and cost 895,243 dollars. Treating until FEV1 is below 35% predicted cost 511,930 dollars and produced 6.64 QALYs. "No Aug" cost 92,091 dollars with 4.62 QALYs. The incremental cost-effectiveness ratio was 207,841 dollars/QALY for Aug until FEV1 is below 35% predicted and 312,511 dollars/QALY for the "Aug for life" strategy. In all sensitivity analyses, the incremental cost-effectiveness ratio for Aug for life exceeded 100,000 dollars. The cost of Aug needed to be reduced from 54,765 dollars to 4,900 dollars for the "Aug for life" strategy to be considered cost-effective. We conclude that, compared with other conventionally used health interventions, Aug is relatively less cost-effective. These results should encourage the development of more clinically and cost-effective therapies for alpha1-antitrypsin deficiency.